A leading law firm welcomes government plans to relax restrictions to allow providers to deliver a mix of homes for affordable rent and low cost ownership, but warns that boards must be able to react quickly to opportunities that arise.
In his Autumn Statement Chancellor Philip Hammond announced increases in capital funding for housebuilding as one of the key challenges of the British economy. “The measures contained a number of proposals confirming the government’s departure from the home ownership rhetoric towards a more diverse tenure mix,” said Oliver Smedley, partner in the Social Housing sector at Clarke Willmott LLP.
“New funding for housing is welcome and will contribute to increasing the housing supply. However it will not dramatically change the context for registered providers who will still have to look for new ways and in particular for joint ventures to increase their development outputs. Such joint ventures are increasingly popular in the sector as a vehicle that allows increasing housing supply by entering into partnerships with contractors, builders and developers and sharing the development risk.
“However, competition with private developers and other registered providers is increasing and what differentiates registered providers from each other is the speed of action and how quickly they can enter into contract.”
Oliver says the popularity of joint ventures is not likely to die away, and if anything it is likely to increase, and being properly informed about risks is critical to maximise the benefits that joint ventures can provide.
“This requires the correct legal structures being in place in advance,” Oliver added. “Stating the joint venture objectives clearly from the outset is critical as it will avoid dispute further down the line. Being commercial and defining clearly how issues such as control and profit sharing will work, are also critical for a good outcome.
“Clarke Wilmott regularly advises clients on joint ventures options and we fully understand the benefits associated with the various forms of creating partnerships.”
Oliver was speaking following a recent seminar of social housing lawyers at the National Housing Federation to discuss joint ventures for development with federation members.
The event was part of Clarke Willmott’s ongoing discussions and engagement with the sector alongside the work with registered providers on navigating the legal landscape and advising on commercial solutions.
The Autumn Statement announced an additional £1.4bn funding for affordable homes and £2.3bn housing infrastructure fund to help with infrastructure for the development of 100,000 new homes in areas of high demand.
Clark Willmott’s national Social Housing team provides a ‘one-stop-shop’ for social housing clients by delivering sector-focussed advice across a wide range of legal areas.
